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International Journal of Economics, Finance and Management >> Volume 5, Issue 2, June 2016

International Journal of Economics, Finance and Management


Causal Relationship between Foreign Capital Inflows and Economic Growth: Empirical Evidence from India

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Author Narayan Sethi
ISSN 2225-7217
On Pages 65-69
Volume No. 2
Issue No. 1
Issue Date March 01, 2020
Publishing Date March 01, 2020
Keywords Private Foreign Capital Inflows, Macroeconomic Variable, Vector Autoregression (VAR), India



Abstract

The present study attempts to examine the casual relationship between foreign capital inflows and economic growth in India. Using the pair-wise Granger causality test (1969), this paper specifically examines casual relationship between foreign capital inflows and economic growth in India. The important observations emerge from pair-wise Granger causality test which shows there is the long-run equilibrium relationship is restored between the following pairs of variables viz., economic growth and Foreign Direct Investment (FDI), economic growth and Foreign Portfolio Investment (FPI).


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